Palmer United Party MLA Larisa Lee (R) at a court appearance earlier this month.

AAP: Jack Bullen

Northern Territory Palmer United Party (PUP) MLA Larisa Lee has pleaded guilty to assaulting her 20-year-old niece for having an affair with her husband.

Lee appeared in Katherine Magistrates Court on Tuesday morning and pleaded guilty to charges of assault and disorderly behaviour in a public place.

She was involved in the fight with her niece outside the Katherine branch of Centrelink in April.

Lee pleaded guilty to punching the 20-year-old in the head several times and dragging her by the hair.

Her lawyer told the court that Lee found photos of her niece and her husband together.

Mr Hope said the politician's husband later admitted to having an extramarital affair.

In an apparent plea deal, the aggravated charge was dropped in exchange for a guilty plea to common assault, which does not attract a mandatory jail term.

The magistrate placed Lee on a good behaviour bond for 12 months, saying the chances of the politician reoffending are very unlikely.

Who is Larisa Lee?

Born in Katherine, about 320km south-east of Darwin.

Official place of residence: Barunga Community (population about 300), near Katherine.

Elected to the NT Legislative Assembly as the Country Liberal (CLP) member for Arnhem at the August 2012 Territory election.

After the election, she was accused of misusing an Aboriginal corporation's emergency fund to pay for campaign expenses.

She quit the governing CLP and joined the Palmer United Party in April 2014.

Later that month, she assaulted her 20-year-old niece, who was having an affair with her husband.

She pleaded guilty to common assault and received a 12-month good behaviour bond.

Outside the court, Lee said she was glad the aggravated assault charge was downgraded and the case had come to an end.

"I'm a person at the end of the day. Betrayal is something no person wants to face and no-one wants to go home and find their niece in bed with their partner," she said.

"Domestic violence is not acceptable.

"I shouldn't have done what I've done. I'm very sorry and it will never happen again."

With the trial "going through the media ... you can see the Government's hands all over this", Lee said.

"I mean that is embarrassing for a politician like myself."

In April, Lee and fellow Indigenous MLAs Alison Anderson and Francis Xavier Kurrupuwu quit the governing Country Liberals (CLP) over claims of racist remarks directed at them and joined the PUP.

They demanded a new Aboriginal Affairs Department be created, all three MPs get promoted, and that four current ministers be dumped from Cabinet.

Lee was elected to the Northern Territory Legislative Assembly as the Country Liberal member for Arnhem at the 2012 territory election.

Several months later, she was accused by staff members of the Jawoyn Association Aboriginal Corporation (JAAC) – representing traditional owners of the Katherine region – of misusing the corporation’s emergency fund to pay for her election campaign expenses.

Lee declared $23,000 in donations, including $16,000 from the JAAC, covering phone, travel and accommodation expenses.

The Opposition demanded a police investigation.

Lee denied the staff members' accusations saying the corporation had donated money to her campaign with the full support of the board.